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Consolidation

FARMINGTON, Conn.--With the Dec. 31 acquisition of Detection Logic Fire Protection, UTC Fire and Security’s service division is now “in terms of size among the top five in North America,” said Antonio Cintra, president of UTC’s Fire and Security Services business in the Americas.

That claim was backed up on Feb. 6 at the Barnes Buchanan Conference. During a discussion about the “top five security alarm companies by market share,” Michael Barnes said UTC hadn’t disclosed enough data to be included in his analysis, but that “there is no question that UTC belongs up here.”

Based in California, Detection Logic is “just short of a $100 million company” Cintra said. It specializes in the engineering, installation and servicing of fire detection and protection systems for commercial businesses. Terms of the deal were not released.

“It’s a large acquisition for us,” Cintra said, adding “it has an excellent management team and is a very profitable company … that will complement what we already have on the West Coast.” Management, including former Detection Logic president Mustafa Colak, will stay on with UTC.

Industry observers told Security Systems News that this is a good buy for UTC. John Mack, head of M&A for Imperial Capital, called Detection Logic a “good operation and a very well run business.” He noted that Detection Logic - which has 13 branches, nine in California and four in the Southwest - had built itself up over the past several years with the acquisition of several smart companies that have good relationships with their local customers.

This additional fire capability will boost UTC’s ability to do whole building automation, he noted. “It’s clearly part of UTC’s strategy to have fire-life safety and security become part of the larger integrated approach to building automation and it’s already a leader in HVAC,” he said.

Cintra said the integration process would be a “mix of give and take.” UTC plans to implement many of its practices and procedures including “our core values such as our rigorous financial planning and ethics practices which we roll out to all new companies,” Cintra said. Other UTC productivity tools, such as GPS on service vehicles and UTC’s iService products that allow technicians to use a handheld device to generate and submit service tickets, will also be introduced to the new company.

On the other hand, UTC plans to adopt some of Detection Logic’s capabilities, namely its “solid IT platform which we’ll leverage among our other five branches on the west coast” and its “design engineering capabilities which are best-in-class.”